Please see below our latest issue of Onboard, Links International's quarterly update that keeps you aware of significant payroll and visa developments across the region.
Maternity leave extension will take three years
Secretary for Labour and Welfare Law Chi-kwong has said that the government will take at least three years to increase the duration of the 10-week statutory paid maternity leave to the 14 weeks recommended by the International Labour Organisation. The reason for the lengthy process is that the change would have a significant impact on employers and therefore a study will need to be carried out first.
New fees for MPF intermediaries and revised fees for occupational retirement schemes starting from 2018
From 1 January 2018, Mandatory Provident Fund (MPF) intermediaries will be required to pay annual fees and application fees to the Mandatory Provident Fund Schemes Authority (MPFA). MPF intermediaries are encouraged to settle the payments of the annual fee via the MPFA eService, or they can pay using online banking, PPS, eCheque or paper cheque.
China sees bigger service trade deficit
The Ministry of Commerce in China announced that the value of China's service imports significantly outweighed that of its exports in the first eight months of the year, due to stronger domestic demand.
Yearly salary analysis for Shanghai in 2017
The 2017 average monthly salary for the Shanghai market has increased compared to last year, whereby private enterprises offer the highest salary range and foreign companies provide the largest salary increase percentage. Salaries in the financial services industry are higher than that of other industries, whilst salaries in the IT industry have increased rapidly. The analysis does not show any obvious difference between monthly packages for males and females.
Enquiry hotline for foreign employees in Shanghai
Shanghai has opened an enquiry hotline for foreign employees, effective 1 December 2017. The hotline offers a consultancy service for employment permits and visa application process to assist foreign employees in these matters.
Minimum wage to be adjusted from 1 January 2018
The Ministry of Labor has announced that the minimum wage in Taiwan will be adjusted to NT$22,000 per month and NT$140 per hour, commencing 1 January 2018.
Social insurance degree change from 1 January 2018
To coincide with the changes to the basic wage in Taiwan, the "Table of Grades of Insurance Salary for Labor Insurance" and the "Table of Grades of Insurance Salary for New Pension" will also be amended, with effect from 1 January 2018.
Changes to Labor insurance and Occupational Accident insurance
The Bureau of Labor Insurance announced the calculation of the Occupational Accident insurance rate for 2017. Employers with 70 or more insured persons are required to pay accident-related rates in their respective industries according to their occupational accident insurance payments of 2014 to 2016.
CPF interest rates increasing from January 2018
In addition to Central Provident Fund (CPF) members' annual 3.5% interest rates on their Ordinary Account (OA) monies and up to 5% on their Special and Medisave Accounts (SMA) monies, these rates will include an extra 1% interest paid on the first $60,000 of a member's combined balances, as part of the Government's efforts to enhance the retirement savings of CPF members.
New electronic PR application system and processing fee
The Immigration and Checkpoints Authority (ICA) has introduced an electronic Permanent Residence (e-PR) system and a processing fee for PR applications. This means that PR applicants can now enter the required information into an electronic application form on the ICA website, rather than having to physically make a trip to the ICA building. The ICA is also introducing a processing fee of $100 per applicant and successful applicants will also pay a $20 fee for the Entry Permit. This changes are effective from 18 December 2017.
New Work Pass card and SGWorkPass mobile app
The Ministry of Manpower (MOM) announced that it will be introducing a new Work Pass (WP) card with a QR code, as well as a free SGWork Pass mobile app. The QR code on the new card will replace the date of expiry. Employers can now use the SGWorkPass mobile app to scan the QR code and check the most updated status, as well as to verify information such as date of expiry and occupation. The new card will be issued in phases over the coming months. In the meantime, existing WP cards will remain valid.
Malaysia expected to implement Employee Insurance Scheme next year
Malaysia's deputy human resources minister Ismail Muttali announced that the Employee Insurance Scheme (EIS) is expected to implement financial aid to unemployed Malaysians in 2018. The scheme is also expected to help workers who have been laid off and are looking for another job and who contribute to SOCSO.
Withholding income-tax exemptions of BPJA assets and the procedures
The Ministry of Finance has issued a new regulation that regulates provisions on both types of Social Security (BPJS Health and BPJS Employment). Under the new regulation, only the assets of DJS Health and DJS Employment will be available of withholding income-tax exemptions. The tax authorities will issue a special taxpayer identification number to all BPKS institutions in order to implement the granting of tax exemptions.
Non-mandatory Central Provident Fund system coming into force 1 Jan 2018
The Law 7/2017, 'Non-Mandatory Central Provident Fund System' was approved by the General Assembly of the Legislative Assembly and shall come into force on 1 January 2018. This system aims to strengthen the social protection for the residents of the Macau SAR in their old age and to complement the existing social security system.
FSS Employment Incentive Programme for disability pension beneficiaries to be implemented on 1 Jan 2018
A new programme called the "Employment Incentive Pilot Programme for Disability Pension Beneficiaries" will come into effect on 1 January 2018. The programme will provide a trial work grace period for beneficiaries of disability pension or temporary disability subsidy. The Social Security Fund (FSS) believes that this programme will help people with disabilities take initiative to participate in the community, build their confidence and enhance their quality of life.
South Korea to increase minimum wage by 16% in 2018
The minimum wage in South Korea is set for its biggest increase since 2001, increasing by 16% to KRW7,530. This wage increase comes with a promise from President Moon Jae-in to help increase the minimum wage to at least KRW10,000 by 2020.
New top marginal income tax rates
Effective from 1 January 2018, the top marginal income tax rate will be increased to 42% (46.2% including local income tax), which will be applicable to taxpayers with an income tax base in excess of KRW 500 million. The second top income tax rate of 40% (44% including local income tax) will be applied to taxpayers with an income tax base of KRW 300 million to KRW 500 million.
Substantial changes to payroll calculation
Substantial changes will be coming into effect from 1 January 2018 affecting the calculation of payroll in Vietnam and these will affect both employers and employees. The changes essentially mean that remuneration payments received by employees will be subject to compulsory Insurance and Personal Income Tax (PIT) unless specifically excluded.
Increase in region-specific base pay
From 1 January 2018, the following changes to region-specific base pay will come into effect:
Region I: VND3,980,000 per month (an increase of VND230,000)
Region II: VND3,500,000 per month (an increase of VND210,000)
Region III: VND3,090,000 per month (an increase of VND190,000)
Region IV: VND2,760,000 per month (an increase of VND180,000).
Overall, the base pay for these four regions will rise by an average of about 6.5% compared with 2017.
Work permit applications can now be made online
The Ministry of Labour, War Invalids and Social Affairs has announced that companies who wish to employ foreign employees can now apply for work permits online. Employers must complete a declaration form and submit a report at least 20 days prior to the day they expect to employ foreign workers. With the new decree, this time period has been reduced from 30 to 20 days.
Thailand launches new online service for work permits and visas
Thailand's Board of Investment (BOI) has launched a new online visa service for BOI-registered companies in order to facilitate the visa application process. A new electronic work permit will replace the current work permit booklet, whilst a new system will allow BOI-registered companies to apply for visas, work permits or renewals online. Implementation of the programme commenced on 1 October 2017 and will be implemented in phases over a 12-month period.
Japan to launch start-up visa programme to lure foreign businesses
In a bid to attract foreign entrepreneurs, Japan is set to launch a nationwide one-year start-up visa programme in 2018. Holders of the proposed start-up visa will be allowed to reside anywhere in Japan for a year, provided they submit plans demonstrating that they can open offices and secure funding during their stay.
Single touch payroll will be required from April 2018
Single Touch Payroll (STP) is a government initiative to streamline the declaration of wages, tax and superannuation contributions to the taxation office. From 1 April 2018, employers with over 20 employees will be required to report wages, superannuation contributions and taxes by the payment day.
Western Australia introduces payroll tax reforms
The Western Australian Government has introduced legislation to implement a new temporary payroll tax scale for the largest employers. Under these amendments, Western Australian employers with an Australia-wide payroll of between AUD100m and AUD1.5bn will have that part of their payroll taxed at a rate of 6%, compared to the current rate of 5.5%. The new rates will apply from 1 July 2018.
Parental Leave and Employment Protection Amendment Bill passed
The Parental Leave and Employment Protection Amendment Bill has passed its third reading in parliament. This means that the duration of parental leave payments will be increased over three years and two stages: from 18 to 22 weeks from 1 July 2018; and a further increase to 26 weeks from 1 July 2020.
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